The government has made good on its Budget promise to introduce a scheme to encourage former UN workers to retire here.
A legal notice was issued,which exempts them from income tax on the pension as long as they also fulfil certain conditions – primarily that at least 40 per cent of the pension should be received in Malta. Any other income arising outside Malta will be subject to a 15 per cent tax rate.
The beneficiary will need to either buy a house worth at least €275,000 if in Malta or €220,000 if in Gozo or the south, or rent a property for either €9,600 or more in Malta, or €8,750 or more in Gozo. The beneficiary will not be allowed to sublet the premises.
The scheme is open to those who receive a pension from the UN Joint Staff Pension Fund (UNJSPF), which was established in 1949 to provide retirement, death, disability and related benefits for its staff and those of 22 other organisations admitted for membership in the fund. As of 2010, the organisations had 121,138 active participants and 63,830 fund beneficiaries, while the assets of the UNJSPF stood at $41.4 billion.
Malta is not the only country to offer tax benefits to UN retirees. According to online resources, in 2013 a number of countries, including India, Singapore and the United Arab Emirates exempt all tax
The tax status is not open to Maltese nationals, or to residents in Malta who already benefit from other residence schemes. To be eligible, they must also not spend more than 183 days in any calendar year in another jurisdiction.
They may also hold a non-executive post on the board of a company resident in Malta, or be involved with entities engaged in philanthropic, educational or R&D work in Malta.
Malta is not the only country to offer tax benefits to UN retirees. According to online resources, in 2013 a number of countries, including India, Singapore and the United Arab Emirates exempt all tax, while the UK, Switzerland and several other EU member states tax monthly pensions but not lump sums. The US, Canada and France have special tax schemes for both.